High Concert Ticket Prices this Summer, Low Concert Turnout

In an article (subscription required) dated October 11, 2004 in the Wall Street Journal, the concert industry is blaming creeping prcies for the slow sales of concert tickets this past summer. Ticket prices were unrealistically high causing revenue to be off as much as 40% compared with 2003. Concert promoters jacked up ticket prices because artists and their representatives demand so much money up front. In turn, agents say they can hardly be blamed for accepting the ever higher bids promoters make for their services. Musicians, too have been partly to blame because eventually greed is the driving force behind the artists asking prices. Another aspect of this situation is the artists are paid guarantees no matter how poor tickets sales are. The artists really do not have any financial risk. Another factor in this situation is CD sales are on decline causing royalty checks to the artists to decline. The only way to make this up, is to go on tour and raising ticket prices. The consumers who purchase the concert tickets are not going for the higher ticket prices especially when they are getting a mediocre seat for a price of $70 to $80. This could be seen as receiving an inferior good and being charged a normal good price. Also, concert tickets could be seen as elastic demand due to the quantity demanded is relatively responsive to changes in price. Personally, I haven't been to a concert for some time but I would have to say if I had to pay $70-$80 or more for a ticket to see my favorite group or artist, I would have to think twice about it. If prices were lower and seating was better, I wouldn't have a problem paying the money for the ticket because my marginal benefit would increase. As the law of demand states, demand will increase as prices fall. Maybe promoters and the artists should take an economics class to determine what the best solution would be to this problem!